Correlation Between Grupo Bimbo and BioForce Nanosciences
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and BioForce Nanosciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grupo Bimbo and BioForce Nanosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Bimbo SAB and BioForce Nanosciences Holdings, you can compare the effects of market volatilities on Grupo Bimbo and BioForce Nanosciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grupo Bimbo with a short position of BioForce Nanosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and BioForce Nanosciences.
Diversification Opportunities for Grupo Bimbo and BioForce Nanosciences
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and BioForce is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and BioForce Nanosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioForce Nanosciences and Grupo Bimbo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grupo Bimbo SAB are associated (or correlated) with BioForce Nanosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioForce Nanosciences has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and BioForce Nanosciences go up and down completely randomly.
Pair Corralation between Grupo Bimbo and BioForce Nanosciences
Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the BioForce Nanosciences. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Bimbo SAB is 9.19 times less risky than BioForce Nanosciences. The pink sheet trades about -0.16 of its potential returns per unit of risk. The BioForce Nanosciences Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 90.00 in BioForce Nanosciences Holdings on October 5, 2024 and sell it today you would lose (15.00) from holding BioForce Nanosciences Holdings or give up 16.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Bimbo SAB vs. BioForce Nanosciences Holdings
Performance |
Timeline |
Grupo Bimbo SAB |
BioForce Nanosciences |
Grupo Bimbo and BioForce Nanosciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Bimbo and BioForce Nanosciences
The main advantage of trading using opposite Grupo Bimbo and BioForce Nanosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, BioForce Nanosciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BioForce Nanosciences will offset losses from the drop in BioForce Nanosciences' long position.Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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